In today’s advertising landscape, data-based targeting, increasingly personalized advertising, ongoing data privacy concerns, and shifting stakeholder power are converging to create a shifting, often uncertain environment.
The question is not if advertising will change, but how rapid and radical that change will be. Following our studies on the future of the telecom, and TV & video industries, we now focus our unique methodology and industry expertise on advertising. Our report The future of advertising: Pathways to survival in four scenarios, explores the factors most likely to influence how today’s advertising players will vie for relevance and market share, and offers four unique visions for the future.
Four takes on the future of the industry
Our study first defined five industry protagonists—digital platform businesses, media companies, agencies, advertisers, and consumers; in each scenario, some of these will emerge as winners and others as losers. Our scenarios were based on a comprehensive set of underlying social, technological, economic, environmental, and political drivers that will shape the industry. We focused our scenario analysis on those drivers that were both highly relevant and highly uncertain. Finally, we arrived at four distinct scenarios likely to play out in the future of advertising, with an accent on both the provocative and the plausible possibilities.
What could your role be in any of the scenarios below? As you review each scenario, what strategic moves do you think could differentiate the winners—or contribute to challenges?
Scenario 1: The Transactional You
Data is the dominant force in this first scenario, with customer contacts and data emerging as the new currencies—the factors that make it possible to predictively target consumers with relevant transactional messages through the right channels at the right time. Shopping in this scenario is convenient and effortless, and advertising content is designed to be informative and not just appealing. For those with a stake in the game, data ownership is key, making clear the difference between winners and losers across the advertising value chain.
Scenario 2: The Creative You
In this scenario, human creativity is the source of targeted, highly relevant campaigns perfectly tailored to individual consumer preferences. Emotion-evoking formats and direct-to-consumer advertising create strong relationships between consumers and brands, and campaigns become highly relevant because they are both highly personalized and creative. In this context, real-time communication plays an important role, with AI providing intensive customization. Importantly, the ability to define and target small and intensely specific customer cohorts allows advertisers to create and deliver messages tailored to, and resonating with, consumers’ needs.
Scenario 3: The Entertained Masses
In our third scenario, entertainment value is the foundation of high-quality campaigns with extensive reach. Advertising becomes truly remarkable. Despite low personalization, consumers enjoy exciting ad experiences that they find worth talking about even outside advertising spaces. The focus on creativity and reach here is not by choice; instead it is necessary in a world where, in the wake of serious data privacy scandals, consumers have chosen not to share their information, and where strict regulatory frameworks inhibit the collection, aggregation, and exploitation of usable consumer data.
Scenario 4: The Fragmented Masses
In this final scenario, brand is king, and buying decisions are triggered largely by brand power and loyalty. Since privacy regulations limit personalized campaigns, advertisers must produce a broad range of options, and aggregate specific niches in order to achieve reach and relevance. Data and AI dominate the ad production process, with human creativity less important. And a fragmented media landscape makes distribution a challenge, with relevant content just as important as access to social media and messaging platforms. In response, advertisers target consumer microsegments, using a large set of niche formats to address each group of consumers.
What’s your take?
What do you see as the most plausible future for the world of advertising? Is it similar to one of the above scenarios, or do you see an entirely different outcome? Have another look at your corporate strategy and consider how well it shapes up in each scenario—are you confident it will hold up in any situation or is it time for some tuning-up?
Take a moment and let us know your thoughts.
In his leadership role, Mark Casey guides strategy across the global network of Deloitte’s Telecommunications, Media & Entertainment (TM&E) professionals to ensure high-value approaches to client engagements and solutions. Currently a partner in the Netherlands firm, Mark brings more than 25 years of experience in providing operational and technology-enabled solutions across the TM&E ecosystem. Mark is active in the M&A domain for media companies and in the transformative changes for newly acquired businesses and their back-office evolution. In addition, he helps companies internationalize their businesses, dealing with market entry and expansion considerations, and identifying partnership opportunities to accelerate their growth.